Over the holiday weekend, I used some of my downtime to watch the totally engrossing and very well-produced docudrama on Apple TV called “WeCrashed.” WeCrashed is the dramatization of the rise and fall
of WeWork and founder Adam Neumann. If you don’t know the story, WeWork was a “unicorn.” Unicorn is the term used in the venture capital industry to describe a startup company with a value of over $1 billion.
Founded in 2010, WeWork grew rapidly into a New York-based business that provided co-working spaces for entrepreneurs and freelancers. In 2019 it had achieved a paper corporate valuation of $ 47 billion. That was based on revenues of 2 billion and expenses of $2.4 billion. The company was ready to go IPO, but then there were issues related to fraudulent accounting and extravagant spending by the CEO, Neumann, and the IPO was withdrawn. After a corporate restructuring, and with the support of the largest shareholder Softbank Group, the company was listed in October 2021 for about $9 billion.
Besides being extremely well done, Jared Leto’s performance of transforming himself into Neumann was mesmerizing. Despite all the really stupid things Neumann did to almost destroy his company and billions of dollars in value, you still feel empathy for the sheer willpower of the character and the possibility that he actually may have been right.
This fascinating story makes for a great case study, so I wanted to share five business acumen lessons that can apply to anyone in business:
Embrace failure and uncertainty
Adam Neumann never feared failure. He embraced it because he was able to learn from it and “manifest” further growth and development. In today’s large organizations, too many people play it safe and don’t think of ways to challenge the orthodoxy and disrupt the status quo. If you want to succeed, you need to have a growth mindset that sees the positive and can learn from mistakes quickly.
Self Confidence doesn’t require cash or capital
As chaotic as things got, Neumann never ever lost his confidence in his ideas and himself. Even when things turned darkest, he had the same self-confidence and belief in his key people. Although knowing you will still have 3-4 billion in the worst case can tend to take the edge off of things, but it was quite apparent that he never ever lost his confidence. It was almost like his fuel, and he was able to leverage it with other people to make them even more self-confident. This includes his work partner and his wife who were extremely key characters in the story.
It starts with a winning aspiration
One of the most influential strategy books of our time, Playing to Win: How Strategy Really Works by Martin and Lafley proposes that everything in business must start with a winning aspiration. WeWork’s winning aspiration was understanding that they weren’t selling shared office space, they were creating communities of connected workers. That aspiration never was compromised.
You grow through scale
Adam Neumann’s downfall wasn’t related to growing too quickly which is what some of his investors thought. As a matter of fact, and in retrospect, he could have accelerated the growth even faster if he pushed it. Incremental growth is nice, but scaled growth is the way to go if you have enough cash and leadership to execute for the long term. You need to look no further than Amazon as the classic case study that did that the best ever.
Too much of a good thing never works in the long run
Talk about “drinking the Kool-Aid!” There were times during the WeCrashe show when the employees of WeWork looked like they were part of a cult. Many former employees described it that way. The overzealous spending and living like there is no tomorrow eventually caught up to them when they ran out of cash and needed to go back to investors one last time.
In summary, this is a show worth investing 10 hours in. It’s insightful, interesting, and packed full of great business lessons for us all.
